Google's $2.1B NYC Office Might Impact Affordable Housing Efforts
Google has been working on adding affordable housing across the country for years, but a new multi-billion-dollar office building could wipe out all of that effort.
Sept. 22 2021, Published 12:15 p.m. ET
Google announced plans on Sept. 21 to purchase real estate at the site of the St. John’s Terminal business center in Manhattan, N.Y. Despite the fact that Google employees aren't expected back in the office until January 2022, the big tech company is going all-in on the workplace environment.
Is Google eliminating the possibility for affordable housing around the St. John's Terminal area in New York City? More importantly, is the company wiping out previous affordable housing funding efforts made across the nation?
Google plans the biggest office real estate purchase since the COVID-19 pandemic started
Google plans to purchase an office space on the west side of Manhattan at St. John's Terminal for a whopping price of $2.1 billion. As the company looks towards a hybrid work environment in the future, the office sale is poised to be the most expensive office real estate contract since the COVID-19 pandemic started.
The company confirmed its commitment to in-person collaboration, even if that involves some virtual work. In a blog post, Google wrote, "Coming together in person to collaborate and build community will remain an important part of our future."
As commercial buildings rise, affordable housing falls
Andrew Berman, the executive director of The Greenwich Village Society for Historic Preservation, discussed Google's move. "We're seeing housing, including rent-regulated housing, being destroyed to make way for tech-related office buildings," Berman told Gothamist.
Affordable housing was once a part of the area west of Soho, and it was poised to be part of the neighborhood's future. However, with companies like Disney and Google staking their claim in the neighborhood, that era has been eradicated.
Google made a $1 billion affordable housing commitment in 2019.
In 2019, Google pledged to commit $1 billion to contribute to affordable housing in the San Francisco Bay Area. With a noted presence in the California region, the company used the pledge as a tactic to eliminate naysayers, whose statements were much like the backtalk it's getting from New York City locals now.
By 2020, Google had allocated $115 million to build 24,000 new modular units in the Bay Area. By decreasing the size of the homes, Google was able to increase its forecast, which originally sat at only 5,000 units.
Google also provided the San Jose with $3 million, which the city allocated toward funding nonprofit organizations, preserving existing affordable housing, and organizing a potential land trust.
Does Google's engagement with St. John's Terminal counteract previous affordable housing efforts?
Google hasn't exactly made good on its commitments on the West Coast. The company still has hundreds of millions to allocate in order to reach its promised $1 billion investment. Meanwhile, it's beginning to plan development on the East Coast, namely in a city that fights tooth and nail for the priciest place to rent in the U.S. (New York City's main competitor is San Francisco).
As affordable housing diminishes, Google's expansion is only contributing to the problem. Following its $2.1 billion purchase at St. John's Terminal, the company will have to commit a whole lot more to affordable housing if it wants to be net positive.